Price action: March soybeans surged 21 3/4 cents to $14.70, a contract-high close for the third consecutive day and a gain of 55 3/4 cents for the week. March soybean meal rose $6.50 to $411.20 per ton, a gain of $18.50 for the week, and March soybean oil rose 93 points to 65.27 cents per pound, the highest close for a nearby contract since Aug. 10
5-day outlook: The soy complex should carry strong upward momentum into next week after drought in South America and Malaysian palm oil’s rally to record highs sent nearby soybeans to the highest settlement since June. Any weekend weather shifts in South America, along with early harvest progress and results, have potential to move prices, and traders will watch for any additional export business after USDA reported a flurry of soybean sales today. Exporters sold 141,514 MT of soybeans for delivery to Mexico and 251,500 MT to “unknown destinations,” both during the 2021-22 marketing year. USDA also reported exporters sold 264,000 MT of soybeans for delivery to China during the 2022-23 marketing year.
30-day outlook: Early-harvest results from Argentina and Brazil and more cuts to private analyst crop estimates could provide added upside impetus ahead of USDA’s Supply and Demand update Feb. 9, though South America’s likely harvest shortfall may be largely factored into prices. Further gains in crude oil and palm oil markets could pull soy complex prices even higher. Indonesia, the world’s biggest palm oil producer and exporter, announced a 20% mandatory domestic sales obligation for all palm producers to slow soaring cooking oil prices. The move boosted Malaysian palm oil futures to a record high today at 5,639 ringgit ($1,346.47) per MT.
90-day outlook: Harvest in South America will accelerate next month, sending fresh supplies into global export channels, and market focus will shift to the U.S. spring planting outlook and a likely boost in soybean acres. USDA’s annual Prospective Plantings report March 31 will be of keen trade interest (we expect soybean plantings to increase 1.2 million acres from 87.2 million acres in 2021). As South American weather becomes less of a market factor, soybean prices likely require a continuation of recently strong export demand to remain elevated. USDA yesterday reported net weekly U.S. soybean sales for 2021-22 totaling 1.026 MMT, up 77% from the prior four-week average. But total export commitments (exports plus outstanding sales) for 2021-22 still lag about 18% behind year-ago levels.
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